No, it shouldn't.

I had to re-read this. I thought you said it should scale off the bigger resource pool, and from what I understand it already does that. You want it to switch between magicka and physical damage depending on the bigger resource pool, nah. One thing that would be okay for me is to switch ultimates to ultimate damage as another type of damage, one that doesn't exist in the CP tree, so ultimate bombs do less damage overall. However, this won't be happening so worry not.

I would say the real problem is that skills scale off damage type in CP. A better system would be to increase the damage of skills based on that stats they scale off of so that we aren't limited to damage type skills, and the devs aren't forced to make up excuses/justifications why stamina dragon knights are now poison based. It's obvious: DKs are DoT oriented and since fire (which procs a small DoT) is magicka damage-user based, they switched it to the stamina damage-user's equivalent, poison, which also can proc a small DoT.

IMO, a passive that increases damage is way too OP and doesn't belong, but that's neither here nor there. If they're going to have it, it's best not to restrict skills in ways that are clearly contrary to design (that's why stamiknights--what I call Stam DK, it has a nice flow--got changed to poison in the first place). When spell-crafting gets here, based on my understanding of its theoretical function, a big wrench will be thrown into how these things work again (unless wrobel reads and makes note of this).


P.S. I think there should be an additional stamina based damage type similar to how magicka has 3 (4 with the no-added-effects magic). I would also try to balance it such that each class focuses on a certain type of damage. That's for a different thread, however.